The Internal Audit Function between Management and Audit Committee - Are there really two masters?

• In Event: Continental Breakfast and Research & Education Forum
  In Paper Session: Table 7: Audit Committees

Abstract

The internal audit function (IAF) is an important ingredient of good corporate governance today, whereas two main addressees rely on IAF’s work - the executive management and the audit com- mittee. However, it is not obvious if the IAF satisfies the needs of both players. Based on a unique dataset from chief audit executives, two logistic regression models identify potential factors that influence the degree IAF’s results are used by the executive management and the audit committee. The results show the existence of various factors, which are relevant for either both or only one of the respective players, depending on whether the IAF focuses on assurance or consulting. Especially if multiple factors influence IAF’s work, a “Serving Two Masters”-situation is likely to occur.

Author

• Marc Eulerich, University Duisburg-Essen